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Home Library Marketing Strategic Management Components of a Strategy Statement

Components of a Strategy Statement

The strategy statement of a firm sets the firm’s long-term strategic direction and broad policy directions.
It gives the firm a clear sense of direction and a blueprint for the firm’s activities for the upcoming years.
The main constituents of a strategic statement are as follows:

Strategic Intent

An organization’s strategic intent is the purpose that it exists and why it will continue to exist, providing it
maintains a competitive advantage. Strategic intent gives a picture about what an organization must get
into immediately in order to achieve the company’s vision. It motivates the people. It clarifies the vision
of the vision of the company.

Strategic intent helps management to emphasize and concentrate on the priorities. Strategic intent is,
nothing but, the influencing of an organization’s resource potential and core competencies to achieve
what at first may seem to be unachievable goals in the competitive environment. A well expressed
strategic intent should guide/steer the development of strategic intent or the setting of goals and
objectives that require that all of organization’s competencies be controlled to maximum value.

Strategic intent includes directing organization’s attention on the need of winning; inspiring people by
telling them that the targets are valuable; encouraging individual and team participation as well as
contribution; and utilizing intent to direct allocation of resources.
Strategic intent differs from strategic fit in a way that while strategic fit deals with harmonizing available
resources and potentials to the external environment, strategic intent emphasizes on building new
resources and potentials so as to create and exploit future opportunities.

Mission Statement

Mission statement is the statement of the role by which an organization intends to serve it’s
stakeholders. It describes why an organization is operating and thus provides a framework within which
strategies are formulated. It describes what the organization does (i.e., present capabilities), who all it
serves (i.e., stakeholders) and what makes an organization unique (i.e., reason for existence).

A mission statement differentiates an organization from others by explaining its broad scope of activities,
its products, and technologies it uses to achieve its goals and objectives. It talks about an organization’s
present (i.e., “about where we are”). For instance, Microsoft’s mission is to help people and businesses
throughout the world to realize their full potential. Wal-Mart’s mission is “To give ordinary folk the
chance to buy the same thing as rich people.” Mission statements always exist at top level of an
organization, but may also be made for various organizational levels. Chief executive plays a significant
role in formulation of mission statement. Once the mission statement is formulated, it serves the
organization in long run, but it may become ambiguous with organizational growth and innovations.

In today’s dynamic and competitive environment, mission may need to be redefined. However, care must
be taken that the redefined mission statement should have original fundamentals/components. Mission
statement has three main components-a statement of mission or vision of the company, a statement of
the core values that shape the acts and behaviour of the employees, and a statement of the goals and
objectives.

Features of a Mission

Mission must be feasible and attainable. It should be possible to achieve it.

Mission should be clear enough so that any action can be taken.

It should be inspiring for the management, staff and society at large.

It should be precise enough, i.e., it should be neither too broad nor too narrow.
It should be unique and distinctive to leave an impact in everyone’s mind.

It should be analytical,i.e., it should analyze the key components of the strategy.

It should be credible, i.e., all stakeholders should be able to believe it.

3. Vision

A vision statement identifies where the organization wants or intends to be in future or where it should
be to best meet the needs of the stakeholders. It describes dreams and aspirations for future. For
instance, Microsoft’s vision is “to empower people through great software, any time, any place, or any
device.” Wal-Mart’s vision is to become worldwide leader in retailing.

A vision is the potential to view things ahead of themselves. It answers the question “where we want to
be”. It gives us a reminder about what we attempt to develop. A vision statement is for the organization
and it’s members, unlike the mission statement which is for the customers/clients. It contributes in
effective decision making as well as effective business planning. It incorporates a shared understanding
about the nature and aim of the organization and utilizes this understanding to direct and guide the
organization towards a better purpose. It describes that on achieving the mission, how the organizational
future would appear to be.

An effective vision statement must have following features-

It must be unambiguous.

It must be clear.

It must harmonize with organization’s culture and values.

The dreams and aspirations must be rational/realistic.

Vision statements should be shorter so that they are easier to memorize.

In order to realize the vision, it must be deeply instilled in the organization, being owned and shared by
everyone involved in the organization.
Goals and Objectives

A goal is a desired future state or objective that an organization tries to achieve. Goals specify in
particular what must be done if an organization is to attain mission or vision. Goals make mission more
prominent and concrete. They co-ordinate and integrate various functional and departmental areas in an
organization. Well made goals have following features-

These are precise and measurable.

These look after critical and significant issues.

These are realistic and challenging.

These must be achieved within a specific time frame.

These include both financial as well as non-financial components.

Objectives are defined as goals that organization wants to achieve over a period of time. These are the
foundation of planning. Policies are developed in an organization so as to achieve these objectives.
Formulation of objectives is the task of top level management. Effective objectives have following
features-

These are not single for an organization, but multiple.

Objectives should be both short-term as well as long-term.

Objectives must respond and react to changes in environment, i.e., they must be flexible.

These must be feasible, realistic and operational